Tax Working Group Report a Good Start

Tax Working Group Report a Good Start to Making New Zealand
a Fairer Place

20 SEP | 2018

The Salvation Army believes
that the Tax Working Group’s Interim Report is on the
right track for reducing inequality and making New Zealand a
more prosperous society.

The Interim Report released
today indicates that the Working Group is looking seriously
at the comprehensive taxation of capital income and at
various environmental taxes. ‘If as a country we finally
introduce capital and environmental taxes we may begin to
address the rising wealth inequalities within our economy,
as well as our quite wasteful use of resources such as
water,’ says Lt-Colonel Ian Hutson – the Director of The
Salvation Army’s Social Policy and Parliamentary
Unit.

‘The proposal to look at taxing capital income
addresses a serious gap in our current tax system. This gap
has placed an unnecessary and unfair tax burden on poorer
households and especially the working poor who presently pay
income tax on every dollar they earn,’ says Lt-Colonel
Hutson.

The Salvation Army agrees with the focus on
taxing deemed capital income as the fairest approach to
taxing wealth as this approach encourages the wise use of
wealth and does not unduly penalise those people who turn
their wealth to productive uses. The Army accepts that
introducing a comprehensive system of capital income
taxation will take time and resources, but believes that
this is a necessary long-term investment in our tax system
to make it fairer and more productive.

The Salvation Army
also supports the Working Group’s interim findings around
GST and in particular its decision not to get into the messy
business of allowing exemptions. ‘The Army appreciates
that GST is a regressive tax which hurts the poorest people
and households the most, but GST is comprehensive,
straightforward and works well at raising tax revenue to
fund public services’ Lt-Colonel Hutson says.

‘We
believe the poorest New Zealanders can best be helped by
reducing income taxes on the lowest paid and through making
income support programmes like Working for Families and
working age welfare benefits more generous’ he
adds.

‘Alcohol in New Zealand is
lightly taxed in comparison with Australia and we know that
the availability of cheap alcohol contributes to our booze
culture and to problem drinking. We hope the final
recommendations of the Working Group include definite
proposals to raise excise duties on alcohol as a way of
reducing alcohol related harm.’

‘The tax system is a
vital part of our Government and wider New Zealand society
and it is important that it aligns with our ambitions and
concerns as a nation.’ Lt-Colonel says. ‘For this
reason The Salvation Army believes that as a country we
should be both courageous and fair-minded as we consider our
tax future because with the right changes we can bring about
a fairer and more prosperous
society’.

The Salvation Army is an international movement and an evangelical branch of the Christian Church that expresses its ministry through a range of spiritual and social programmes. Our operational headquarters for New Zealand, Fiji and Tonga is in Wellington, New Zealand.

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